Want to open a bank account with someone else? Precautions before proceeding

if you go open a bank account with someone else, whether it’s a friend, family member or boyfriend, it’s important that you know the consequences of this decision. For example, when opening an account with someone else, you will certainly be thinking that the money deposited there is also yours, but this may not be the case. Therefore, it is important that before opening the account you know the possible risks to which it will be exposed.

Various account types

If you want to open a bank account, the first question you will be asked is which type of account you want to open. You can open the account alone or with other holders, and there are three types of accounts with multiple holders. The movement of the account is different depending on the type of account you decide to open, i.e. not all of them can be used via homebanking or a debit card.

singular account

It’s a deposit accountplaced on order with only one holder. If you are going to open the account alone, it will be this type of account that you will have to choose. The bank considers that all the money you deposit is yours. You will be provided with the means to freely operate the account. That is, you can have a debit card, access to homebanking and checks although these are increasingly in disuse. Despite being able to move your account freely, remember that with a debit card or homebanking you can only move within the limits defined by the bank, having a cost (It appears in the bank’s price list and is on the website of the financial entity). If you want to transfer higher amounts, you have to do it by check or go to the counter and give the instructions in person. In the latter case, the transfer cost is higher🇧🇷

Collective account

Are accounts with more than one holder. Account movement depends on the type of account you choose. Depending on how they are handled, collective accounts can be:

Solidarity

These are accounts that can be moved freely can each of the holders who will be given a debit card and access to homebanking, if you want. Transactions are carried out using these two means of payment, as in the case of individual accounts, within the daily limits defined by the bank, with a fee included in the price list being charged for each transaction. If you want to move Higher amounts must be done by check or at the financial institution.

joint

are accounts that can only be moved together by all account holders. Which means that holders do not have a debit card or access to homebanking. To move the account they have to do it by check or go to the counter.

mixed

These are accounts whose movement holders agree with the credit institution. For example, in an account that was opened by Miguel, Luís and Diogo (fictitious names), they can define that Miguel can operate the account alone, but that the other two can only do it either together or each with Miguel . In this case, Miguel may have a debit card and access to homebanking, but Luís and Diogo may not.Read more: Closing a bank account can be done by you or by the bank

Risks of different types of accounts

If in the single accounts there is no associated risk as to who owns the money deposited and regarding movement, the the same does not happen in the collective accounts. And this is a risk for anyone who opens a bank account with someone else.

Who owns the deposited money?

Financial institutions consider that deposited amounts belong in parts equal to the account holders. This means that in a single account all funds belong to its holder, and in case Collective accounts, for banks, the funds belong in equal parts to the account holders. That is, if Miguel and Diogo open the account together, regardless of the type of account they choose, the amount in the account is shared by both of them. Even if it was only Miguel who deposited money, half is legally Diogo’s.

Death of a holder

O greater risk inherent to the ownership occurs in the death of one of thems. Upon learning of the death, the institution blocks the part corresponding to the deceased holder, which can only be moved by the heirs. The remaining part, for the bank belongs to the other holders.Let’s go back to our example (with fictitious names), Miguel and Diogo opened an account, and only Miguel made deposits in that account. Due to Miguel’s death, Miguel’s heirs are only entitled to 50% of the amount deposited. That is, half belongs to Diogo, who can dispose of them freely, leaving it up to him whether or not to deliver that amount to Miguel’s heirs.And the same is true of other collective accounts with joint or mixed transactions🇧🇷

Solidarity movement also has risks

As we mentioned, the solidarity accounts can be operated freely by each of the holders. So, if you open the account with someone else, make sure you have complete confidence in her🇧🇷 In other words, that he does not operate the account without his knowledge and does not misappropriate the money. Let’s see an example: Joana opened an account with Pedro (fictitious names), her boyfriend where they regularly deposited their salaries and savings. The money belonged to both of them and they operated the account jointly. And they had a significant balance. However, they separate one of them withdraws all the money from the account which was zero. That is, he appropriated the money in its entirety and not just the part that corresponded to him. Although he acted in bad faith, before the bank there was no irregularity so the injured party will not be able to act against the other. Also read: Do you know which bank fees you can avoid?

Credits are the responsibility of all holders

In the case of collective accounts, banks, as a general rule, do not grant credit to only one of the holders🇧🇷 In other words, all account holders are borrowers of the credit, who are responsible for paying the monthly installments and, consequently, for their repayment. If, despite credit being requested by all, if it is intended for only one of them, there may be a problem for the others in case of non-compliance🇧🇷 In other words, they will have to ensure payment under penalty of being placed on the Banco de Portugal blacklist. Let’s see an example, returning to the solidarity account that Miguel and Diogo opened and where only Miguel made deposits, Diogo having accessed be part of the account at Miguel’s request. At a certain point, Miguel decides to ask the bank for a car loan to buy a new vehicle. The credit is contracted in the name of both, with Miguel being responsible for paying the installments. However, a year later his economic situation changed and was no longer able to pay the installments. Before the bank, it doesn’t matter who was or wasn’t paying, both are responsible for paying the installment🇧🇷 Thus, either Diogo pays the installment or the credit will be considered in default for both of them, being registered at Banco de Portugal as such. In this way, Diogo will have to pay a credit from which he had no benefit, under penalty of being unable to contract a new loan with a financial institution.Also Read: Inactive Bank Accounts: Beware of Commissions